Well, in geometry class, מַעֲגָּל is the area of the circle, but עִגּוּל the line around it: . In real life they are very similar, but notice that the first is used in many stock phrases like מַגְגַּל־חַשְׁמַלִּי "electric circuit" or מַגְגַּל־קְסָמִים "vicious circle".
Unrelated question but how can you add pictures to your Duolingo comments? I tried this before and failed
I'm a little confused, your diagram has עיגול as the inside but your text says its the outside. If the diagram is right, it makes sense that עיגול would mean a circle like a dic and מעגל would mean something like the people are standing in a circle. I can also see how saying that sign is a circle could use either.
I said "a square never will be a circle" and was wrong. Can anyone explain what the difference is or if this is just an example of poor machine learning?